Markets Can't Be Pleased

Apple Computer makes four times as much money as last year, then blows away the competition with the hot new video iPod--and Apple stock tanks.

Alan Greenspan says the U.S. economy weathered record oil prices "reasonably well"--and the Fed gets blamed for talking down the stock market.

And no matter what the trade deficit and consumer price index reports show over the next couple of days, Wall Street won't be satisfied.

Today it was the same story in the stock market that's been playing since the first of the month: Described by market analysts as "disappointed," traders sold all kinds of stocks.

The Nasdaq Stock Market composite index continued to suffer the most, sliding almost 24 points to 2,037.47. The Standard & Poor's 500 stock index fell 7 points to 1,177.68 and the Dow Jones industrial average dropped 36 points to 10,216.91.

Since the third quarter began on Oct. 1, the market has been down six out of eight days, with the Dow down more than 350 points, the Nasdaq composite off 115 points and the S&P 500 behind by 40 points.

Wall Street is looking so desperately for reasons to buy stocks that the search has become an exercise in self-defeating frustration. No good news--or even no news at all--is automatically considered bad news. Lack of motivation to buy becomes lack of inhibition about selling.

Apple's third quarter numbers, reported after the bell on Tuesday, were disappointing only to investors who had bid up Apple stock in advance of the report. Apple stock jumped from $34 a share to $54 a share between May and September in a wave of enthusiasm all to familiar to anyone who watched technology stocks.

Apple sold 6.5 million of its iPod music players last quarter--more than three times as many as a year ago. But Wall Street was looking for 8 million sales and wasn't satisfied with Apple's explanation that it couldn't make iPods fast enough to keep up with the demand.

Nor was Wall Street wowed when Apple's Steve Jobs unveiled the long-awaited video version of the iPod today and simultaneously sprung the surprise that Apple Podsters will soon be able to download several popular ABC TV shows.

Only someone with unreasonable expectations could regard what's happened to Apple over the last two days as good reason for the stock to fall 5 percent.

So, too, with Wall Street's reaction to Greenspan's comments about the resilience of the U.S. economy in the face of the hurricane-induced energy shock. Wall Street badly wants to hear that the Fed soon will stop raising interest rates--even though every economist worthy of a Ph.D. knows that rates are still low by historical standards. Fed watchers in Washington have been saying for weeks that Greenspan and company plan to stay the course, but Wall Street wants the rate increases to stop and reacts negatively to the non-news that they won't.

As stocks have drifted lower over the last week and a half, Wall Street pundits have predicted the market will turn higher once third quarter earnings reports begin to flow next week. But given the way Wall Street has been reacting lately, that is no sure bet.